KiwiSaver providers are cautiously optimistic that the announcement of a ceasefire in the Iran conflict, brokered under the firm leadership of US President Donald Trump, may strengthen investment markets.
Sharemarkets rose following news that Trump was prepared to enter a ceasefire agreement with Iran, provided the Strait of Hormuz remains open.
Since the Middle East conflict began, Morningstar data shows typical growth funds have dropped about 4.3% though they have already recovered roughly half of that decline. Last year’s Trump-led tariff announcements triggered a 5% peak-to-trough drop, which rebounded fully within five weeks, underscoring market resilience under strong U.S. economic policy.
Morningstar spokesperson Greg Bunkall emphasised that attention will now shift to the markets, noting that the ceasefire should have a positive influence on KiwiSaver returns.
Dean Anderson, founder of Kernel, said markets had largely held up and were seeing beyond short-term noise.
“However, as we have all been experiencing over the past couple of months – and years – is how little weight to put on a day-by-day message.
“The news, tweets, and media stand-ups are continuing to convey a different message each time. For now, the world remains in limbo, and the underlying pressures of rising oil prices are not going to ease overnight.”
“For investors, as boring as it sounds, it remains the case to simply focus on the bigger long-term picture. There aren’t any ‘safe haven’ bets at the moment, we’ve seen all asset classes impacted, so the key is remaining diversified, continuing to contribute to KiwiSaver, and avoiding attempting to time the market or pick a hot stock/sector in this environment.”
Greg Smith, investment specialist at Generate, described the market reaction to the ceasefire as a relief rally rather than a full resolution.
“Markets are giving the ceasefire the benefit of the doubt – but it remains conditional. The key issue is whether the Strait of Hormuz fully reopens and supply disruptions are resolved. Until that’s clear, there’s likely to be an element of caution.
He noted that this follows a familiar pattern of escalation and last-minute de-escalation, typical in global crises, and that volatility is likely to persist in this headline-driven environment. “This looks more like a temporary circuit breaker than a lasting peace agreement, with volatility likely to remain elevated in what is still a fluid, headline-driven environment. The same risks could re-emerge quickly if negotiations stall or tensions flare again.”
Despite the uncertainty, Smith highlighted that KiwiSaver disruptions have been modest.
“Even with recent volatility, global markets are still only around 5% to 10%below their record highs, which highlights how measured the pullback has been. Diversification and the defensive characteristics of the NZ market have also helped cushion the impact from our perspective.
Smith added that periods like this present opportunities for strategic investment. “We’ve leaned into the volatility to selectively add to high-conviction areas where we see strong structural growth – rather than stepping back. In particular, we’ve continued to build positions in areas like AI, where earnings momentum remains strong, and adoption is still in its early stages.”